Groundnuts in Senegal - Costs of Globalisation

• History of Groundnuts:

  • Groundnuts had been Sengeal's main export since its introduction by the Portuguese in the 16th Century.
• World Bank Interference - 1960s:

  • In 1960 when Senegal gained independence it was in need of modern farming methods.
  • The World Bank provided a loan and production increased.
  • With this increase in production the crop was exported to developed countries.
• Global responses to increased production:

  • Other countries began to increase their production of groundnuts, causing a surplus in the global market.
  • Due to the large surplus, prices came down as the demand was not high enough to meet the supply.
  • This led to a decline in Senegal's export of groundnuts and they had to file for bankruptcy.
• World Bank Support - Bankruptcy:

  • The World Bank advised Senegal to start a reforms programme.
  • Offered fertilisers, seeds and monetary help.
  • Under their instruction, the groundnut industries were privatised and public spending was cut.
• Senegal Present Day:

  • As the situation worsened, Senegal had to borrow money from the IMF and World Bank.
  • Today Senegal is one of the most heavily indebted countries.
  • Spends more on paying debts than health and education combined.